The Fed proceed steadfast

Fed’s chairman Yellen confirmed the hawkish position, notwithstanding the lack of inflation (which herself said it is a bit of mystery – very candid answer).

The US balance sheet normalization starts in October and the Fed hike for December and next year is in progress (although the markets doubts that with an implied probability of a December rate hike of 64% and higher rates at a lowly 43%).

My personal take is the Yellen did not like to shake the market and she knows that anyway she is up for re election in January.

I am not really convinced that the US economy is so good and I think the need to raise rate is more due to the fact that the FED needs to be able to lower rates when the next recession comes (we are in longest no-recession periods).

While the markets reacted quite flatly, US Dollar, Treasuries rallied and gold fell to the all important level of $1,300.